The American Hospital Association and four health systems are suing the federal government for allegedly refusing to pay for "hundreds of millions of dollars for necessary care" in Medicare claims that were flagged by private contract auditors.
The suit, filed Thursday in U.S. District Court in Washington, D.C., claims that the Centers for Medicare & Medicaid Services has violated the Medicare Act by declining to reimburse the audited claims of hospitals, even though the claims were ultimately acknowledged by CMS to be reasonable and medically necessary.
AHA President and CEO Rich Umbdenstock said in an interview Thursday that the suit was prompted by "member frustration with the policy and with the hit they take after these medically necessary services have been provided."
"We pointed this out to CMS and have been in conversation with them, but we were not able to get a resolution," Umbdenstock said.
At the center of the conflict are the private recovery audit contractors that comb hospital records months and years after care is delivered to flag questionable payments. RACs, which are paid a percentage of the money they recover from hospitals and other providers, often retroactively determine that procedures billed as inpatient hospital care under Medicare Part A should instead have been delivered as an outpatient procedure under Medicare Part B.
Re-billing Prohibited
However, when Part A reimbursements are denied or rescinded, AHA says, CMS refuses to allow hospitals to re-bill the care under Part B.
"They have put in their policy manual that you are not allowed to re-bill. Period," Umbdenstock says. "They determined that it was medically necessary, but shouldn't have been billed under Part A. We're saying 'if it is medically necessary we should be able to bill under Part B' and they are saying 'no you can't bill.'"
The suit states that "CMS has made no effort to articulate a statutory justification—or any justification—for this policy. Nor could it. Put simply, when a hospital furnishes reasonable and medically necessary items and services, if payment cannot be made under Part A, it must be made under Part B."
AHA says that in the first quarter of 2012, hospitals reported that they were forced to pay $236 million for medically necessary inpatient items and services that RACs later determined should have been provided in an outpatient setting.
Estimated Costs: 'Hundreds of Millions'
AHA General Counsel Melinda Hatton, reached by phone Thursday, said that it's hard to determine exactly how much the CMS denial policy is costing hospitals. "We expect it is in the hundreds of millions but we just don't know the exact number," she said.
"Some hospitals chose not to appeal claims that should and could have been paid under Part B. There is not a good way for us to know the exact number other than that it is large and it is growing."
Joining AHA in the suit are: Missouri Baptist Sullivan Hospital, in Sullivan, MO; Munson Medical Center, in Traverse City, MI; Lancaster General Hospital, in Lancaster, PA; and Trinity Health Corp., in Livornia, MI.
The hospitals complain that the CMS policy creates "prolonged uncertainty about whether Medicare will ultimately pay for the services previously provided (and) wreaks havoc on hospital financial planning, including the ability to assess capital and staffing needs. Both the uncertainty and the actual loss of Medicare funds ultimately may adversely affect patient care."
The hospitals want a federal judge to strike CMS' payment denial policy because it is "contrary to federal law, arbitrary and capricious, and invalid for failure to undergo notice and comment."
The hospitals also want CMS to repay them for the "reasonable and medically necessary services they provide to patients. No matter whether it was provided in the inpatient or outpatient setting, Medicare must pay hospitals for such medically necessary care."
RACs have been a continuing source of friction between hospitals and the federal government every since they were created as part of the Medicare Modernization Act of 2003. CMS reported in May that RACs collected $1.86 billion in overpayments from October 2009 through March 2012, but identified only $245.2 million in underpayments.
Hospitals say that RACs are incentivized to aggressively and unfairly flag hospitals bills because the auditors keep a percentage of the money they identify, even if the billing classification is later proved to be justified.
A CMS study found that about 40% of RAC findings are appealed, but providers win those appeals about 75% of the time. Despite the good odds of winning an appeal providers complain that the process is too costly and cumbersome.
"If you look at the complaints from the individual hospitals you see how costly it is for them to appeal these RAC decisions," Hatton says. "There are some great examples that hospitals have of the number of employees they have had to hire and outside services they have had to retain. It is no small undertaking to challenge every improper denial of a RAC. There is no provision that I am aware of that pays you for the cost of the appeal. You'd be lucky if you got paid under Part B."
Audit Reform Bill Pending
The Medicare Audit Improvement Act of 2012, introduced in the House in October, calls for a number of improvements and financial penalties for—among other things—overturned appeals. The Office of Inspector General has announced plans to examine the Centers for Medicare & Medicaid Services payment policies to hospitals under Part A and Part B next year.
Umbdenstock says AHA supports the legislation in Congress that would curb RAC abuses.
"It tries to bring some balance to the numbers of records RACs can demand at one time and the burdens on hospitals of meeting all of this, which members find so onerous. It puts some boundaries around the process and brings it to a more reasonable level of scrutiny and accountability," he says.
Hatton says the AHA suit is similar to a recent suit settled last week by Medicare beneficiaries that dealt with scope of services. "It has the same basis – that CMS had a policy for which they had no statutory authority that was denying in that case services – in this case for services rendered," she says. "It is very similar... in that there it is a policy based on an absence of statutory authority."
Hackensack University Health Network President and CEO Robert C. Garrett spoke with HealthLeaders Media on Wednesday afternoon to offer an update on the three-hospital health system's recovery efforts following Hurricane Sandy.
HLM: How did you fare in the storm?
Garrett: "It's been a busy and stressful time but I have to say our team here has performed magnificently. We started the preparation a week before the storm hit, as soon as the models showed it coming up the East Coast and hitting New Jersey as a direct target.
We had a delivery of fuel for our diesel generators to make sure that if we were on emergency generator for several days we were prepared. Our disaster plan went into effect on Monday.
We had an incident command center set up. We lost power about 6:00 p.m. and we immediately switched to the emergency generators which remained on until late Tuesday night.
About 85% of our power has now been restored, but we still have about 15% out including our ambulatory operating rooms, our diagnostic center, and a breast imaging center which are located in a building with a different power feed. That is still operating on generator power."
HLM: What challenges did the storm present?
Garrett: "A sister hospital, Palisades Medical Center which is located a few miles from here on the Hudson River, started to flood mid-day Monday. By Monday evening they had to evacuate the facility, which was led by the National Guard. The evacuation was completed by about 9 a.m. Tuesday. We received and treated 60 patients from the evacuation; 43 remain here and 17 were sent to an affiliate hospital.
That was a real challenge for us because the patients came over with some of the caregivers from Palisades, but it was in the middle of the night and early morning and we were already pretty full.
We had to make arrangements where we could on where we could take care of them appropriately. Our care team came up with a great contingency plan. We were able to empty out our observation unit and relocate them to another area where we could make room for the patients from Palisades."
HLM: Given Palisades' proximity to the Hudson, did you already have a contingency plan for their evacuation?
Garrett: "They had a similar evacuation, though not quite as big last year when a storm hit one of their clinical buildings. So they were on the radar screen and with the predictions of storm surge and where the storm was hitting and the impact it would have on the Hudson River, we definitely were in close communication with them.
On Monday night when they decided to evacuate, their CEO called me directly and said they were going to put the evacuation plan into effect. We worked all night long on it."
HLM: Who was involved in the evacuation?
Garrett: "We coordinated this with our EMS community and the National Guard as part of the state response. There was good coordination in advance of the evacuation. But even with good coordination when you are evacuating so many patients it is still a very difficult process. But I was proud of our team and the way they responded."
HLM: Is Hackensack University Medical Center in a safe area?
Garrett: "We are on pretty high ground on the top of the hill. In Hackensack there are parts that flood, so our biggest issue is getting around the streets when we need to respond to a particular emergency or situation. One reason why we don't have complete power back is that one of our power lines runs through a substation that is currently under water."
HLM: Have you suspended non-emergency operations?
Garrett: "No. We are moving forward with a full schedule. In fact it is very busy today because there were so many cancellations on Monday and Tuesday. We are fully functional and operational. Most of our operating rooms are on regular power and some of the ambulatory operating rooms are on emergency power but we are able to proceed with a full schedule."
HLM: Was there any damage to your hospital?
Garrett: "Just minor. Here in Hackensack we had a little bit of wind damage. A piece of our cancer center building roof was damaged and a sister hospital at Mountainside got through it well.
There are some branches and down trees but they didn't destroy or damage any hospital assets. It's pretty much the same story up in Pascack Valley; trees and limbs down but not damage to property."
HLM: What areas might be reassessed as you examine HUMC's response to the storm?
Garrett: "The things that can always improve are communications. Not just internally in the medical center, but also the external communications that come to us. That is something I want to review with first responders and the state and federal responders.
There is a lot of information that comes in at the height of a storm and sometimes it is conflicting. Obviously you want to act on good information and that can always be improved."
HLM: Is the full staff back on duty?
Garrett: "We never had an issue with staffing. People stayed if they had to and people came in early to make sure they were here. If they were in doubt, many staff members packed a bag and stayed overnight.
We had cots available for people to sleep in shifts. As a matter of fact, in a couple of areas we had so many volunteers who wanted to stay longer or came in earlier that we had more than enough staff."
HLM: How will you be compensated for treating the patients transferred from Palisades?
Garrett: "With an emergency situation the sending hospital, the receiving hospital and the insurance companies get together to work out a fair settlement. There is nothing really prescribed ahead of time when something like this happens because usually they don't make those contingencies.
Whether it is Medicare or a private insurance company, those will be worked out. With Medicare it will be worked out through a fiscal intermediary and with the private insurance companies it will be worked out directly with those insurance companies—in our case Palisades and Hackensack together."
HLM: There have been some suggestions in the media that New York University Langone Medical Center in Manhattan was not adequately prepared for this disaster. Is that criticism fair?
Garrett: "It's tough. It is always easy to be the Monday morning quarterback. But these are tough decisions to make. If you overreact, people criticize you as well. You can be accused of disrupting patient care. At NYU they had to move a lot of critical care patients, even patients who'd just had liver transplants.
You can imagine that if they overreacted and the storm didn't come or wasn't as bad as it turned out to be there would be criticism on the other side that you might have endangered patient care by overreacting.
These are difficult decisions. My advice would be, let the dust settle. Once everything gets back to normal in a couple of weeks let's do a fair critique. Let's see what information was available at the time and come to see how we can do things better."
HLM: Do you have advice for other hospital leaders who may someday face a disaster threat?
Garrett: "Always prepare for the worst and get ahead of it. As much as you may think you are ahead of it use the time wisely to really plan and get staff involved. We here have a great team effort and team culture. That helps. If you can build that culture when you have a disaster of this magnitude it is enormously helpful."
The dangers and costs of cigarette smoking have been widely known for decades. It would be difficult to find any credible source that would defend smoking in the workplace or in other public areas. The only question left unresolved is the quantifiable effectiveness of workplace smoking bans.
The answer may be better than expected.
New studies suggest that workplace smoking bans are proving to be remarkably effective tools for reducing a number of smoking-related illnesses, both among smokers and those affected by second-hand smoke.
A study out this month in the Journal of the American Medical Association provides impressive findings. Researchers in Olmsted County Minnesota, home of the Mayo Clinic, examined public health data in the county in the 18 months immediately before and after a smoke-free workplace law ordinance was passed by the Olmsted County Board of Commissioners in 2007.
The JAMA study found that myocardial infarction fell by 33%—from 150.8 to 100.7 per 100,000 population, and sudden cardiac death fell by 17%, from 109.1 to 92.0 per 100 000 population.
The study concluded that the extent of the decline could not be explained by "community cointerventions or changes in cardiovascular risk factors with the exception of smoking prevalence. As trends in other risk factors do not appear explanatory, smoke-free workplace laws seem to be ecologically related to these favorable trends. Secondhand smoke exposure should be considered a modifiable risk factor for MI. All people should avoid secondhand smoke to the extent possible, and people with coronary heart disease should have no exposure to secondhand smoke."
Also this month, a separate study in the American Heart Association's Circulation magazine examines the relationship between smoke-free legislation and hospital admission or death from cardiac, cerebrovascular, and respiratory diseases.
Examining dozens of previous studies and using a dizzying methodology, the Circulation report determined that "smoke-free legislation was associated with a lower risk of smoking-related cardiac, cerebrovascular, and respiratory diseases, with more comprehensive laws associated with greater changes in risk."
Barbara Yawn, MD, a family physician and director of research at the 66-bed Olmsted Medical Center in Rochester, MN, calls the findings, particularly those in JAMA, "really very impressive."
"Most of us thought we'd see a reduction of maybe 10% or 15%, but the studies have been quite remarkable," Yawn told HealthLeaders Media.
Yawn did not take part in the JAMA study but says those findings are consistent with a study she conducted that examines cardiac and respiratory events related to smoking and air pollution. The study will be published in the American Journal of Public Health.
"We looked at air pollution levels before and after the smoking ban in public places and there is a substantial difference," she says. "Even when we have fairly high air pollution levels, all of the cardiac and breathing problems don't go up nearly as high any more. It was the combination of air pollution and these smoking in public places that were giving us a double whammy. Now we have at least taken the one away that we can control."
Minnesota's hospitals have been smoke-free for more than 10 years. That public smoking ban has been extended to restaurants, bars, and retail stores. "You pretty much can't smoke anywhere except outdoors and away from buildings," Yawn says.
As a result, she says "we have seen a decrease in asthmas, asthma exacerbations, asthma visits to the emergency room, asthma hospitalizations, and chronic obstructive pulmonary disease. We have seen a decline in the visits to our offices for acute problems and urgent care and emergency rooms and hospitalizations."
It's intriguing to consider what other public health problems out there might be dramatically reduced with well-crafted legislation. Could we see the same sorts of reductions in medical events with laws or public policies that tackle obesity?
"We would love to cut back on the availability of high-calorie lunches in schools," Yawn says. "There are other ways to get them those fruits and vegetables besides sugary juice and fried foods. We would all like to turn to school lunches because those kids are captive. What can we do to help in that arena because we know that obesity doesn't start when you are 25 or 30 or 40? It starts in school and you eating habits there."
The leaders and medical professionals in the nation's community hospitals, who are among the most trusted and respected people in their communities, are particularly well suited to press for these sorts of public policy changes.
Imagine, for example, the cost savings and the quality of live improvements that millions of Americans would enjoy if we could see a 33% reduction in obesity-related chronic illnesses such as diabetes.
Yawn says anti-smoking ordinances provide the blueprint for cost-effective, preventative public healthcare policy. She believes the lessons learned can be applied elsewhere, the results replicated.
"Stopping smoking in public places has to be one of the most doable and effective tools that we have," she says. "This is really an important instance of where we need to be going with improving people's health. I can give them medication and I can improve one person at a time but if we do these public health measures we can improve the lives of hundreds and thousands of people over a period of time by something like this public approach to smoking."
Hospital and health system mergers, acquisitions and collaborations continue at a brisk pace during the week of October 21-26.
Missouri Hospitals Form Collaborative
Missouri's Saint Luke's Health System of Kansas City, BJC HealthCare of St. Louis, CoxHealth of Springfield, and Memorial Health System of Springfield, IL, have created a joint BJC Collaborative, LLC. The four health systems will remain independent under the collaborative, which will have a combined "footprint" of 4,821 hospital beds in Missouri, Illinois, and Kansas, and combined annual revenues of almost $7 billion.
The health systems forecast that the anticipated savings generated by the collaboration will allow them to deploy clinical programs and services to improve access and quality of care while lowering costs.
Saint Luke's is the largest non-profit healthcare provider in the Kansas City area and includes 11 hospitals and several primary and specialty care practices. BJC HealthCare is a 13 hospital system serving eastern Missouri and southern Illinois.
CoxHealth is Springfield, MO's only locally owned not-for-profit health system, and includes three hospitals and more than 65 clinics in 20 communities. Memorial Health System is a three-hospital, non-profit health care organization serving Illinois patients in a 40-county region.
Illinois' Advocate Health Care Acquires Sherman Health
Also last week, Advocate Health Care announced that it had signed a letter of intent to acquire Elgin, IL-based Sherman Health Systems. The deal is expected to be formalized sometime next summer. No financial information was disclosed in the media release announcing the acquisition.
Advocate is the largest health system in Illinois with 10 acute care hospitals, the state's largest integrated children's network, five Level I trauma centers, two Level II trauma centers, the state's largest home healthcare company and more than affiliated 6,000 physicians.
Sherman Health Systems includes the 255-bed Sherman Hospital, three immediate care centers, a skilled nursing and rehabilitation facility; and home health services. The system employs more than 2,200 people and more than 600 physicians on its medical staff.
"We're pleased that we will offer our patients the expertise of one of the top 10 health systems in the country," Sherman Health President/CEO Rick Floyd said in a joint announcement. "Through this partnership, Sherman will be able to grow and expand our services at an accelerated pace to become a distinctive, regional destination for care."
St. Joseph's MC, U of MD Medical System Finalize Merger
Baltimore Business Journal is reporting that the University of Maryland Medical Center in Baltimore will finalize its long-expected merger St. Joseph's Medical Center around Nov. 1.
HealthLeaders Media contacted the press office at UMMC on Friday but they said they weren't ready to announce the details of the deal.
The assets only acquisition has been underway since March, when St. Joseph's parent Catholic Health Initiatives announced it would negotiate exclusively with the University of Maryland to acquire the Towson hospital, the Business Journal reported. However, the closing date has been delayed for three months for unspecified reasons.
McKesson Corp. Buys PSS World Medical Inc. in $2.1B Deal
Of course, hospitals aren't the only corner of the healthcare marketplace that is seeing acquisition and consolidation.
Healthcare HIT giant McKesson Corp. announced last week that it will purchase PSS World Medical, Inc. for $29 per share in cash. The total transaction, including the assumption of PSS World Medical's outstanding debt, is valued at approximately $2.1 billion, but is still subject to approval by the PSS shareholders.
"The unified organization will bring extensive distribution capabilities, deep product and technology expertise and a broad portfolio of business services to an expanding industry, helping our customers improve efficiency and productivity, and deliver better care," McKesson CEO/Chairman John H. Hammergren said in a joint media release.
Leonard Green & Partners Acquires CHG Healthcare Services
Salt Lake City-based CHG Healthcare Services, a healthcare staffing firm, was acquired by Leonard Green & Partners, a private equity firm, and Ares Management LLC, an assets manager, the companies announced jointly.
CHG is now majority-owned by funds affiliated with J.W. Childs Associates, LP. The transaction is expected to close by the end of December. Financial terms were not disclosed.
CHG is one of the largest temporary healthcare staffing firms in the nation and is the largest locum tenens staffing firm in the nation. The company has more than 1,400 people in seven offices nationwide.
The U.S. Supreme Court ruling last summer that lets states opt out of Medicaid expansion under the Patient Protection and Affordable Care Act could saddle the nation's safety net hospitals with $53.3 billion in uncompensated care costs by 2019, according to the National Association of Public Hospitals and Health Systems.
"It's a projection based on [Congressional Budget Office] estimates of the additional number of uninsured as a result of the Supreme Court's decision," Beth Feldpush, vice president, policy and advocacy, at NAPH told HealthLeaders Media.
The June 28 landmark 5-4 ruling by the Supreme Court upheld key components of the PPACA, including the individual mandate. However, the justices struck down as too coercive the law's attempts to get states to expand their Medicaid programs.
Feldpush says the high court's ruling skewed a balance in the law under which disproportionate share hospital payment cuts to safety net hospitals would be offset by expanded Medicaid coverage.
"Certainly the Supreme Court's decision changed the landscape. What was assumed to be Medicaid expansion in every state can't be assumed any longer," Feldpush says.
"When you think back to the assumptions that were made when the Affordable Care Act became law, at that time CBO said 'we expect 'X' number of people to get coverage and therefore the dollars in uncompensated care costs absorbed by hospitals will decrease.' The law was written with some sense of a balance between those two factors," she said.
"The Supreme Court decision now says Medicaid expansion is voluntary, but those cuts are hardwired into the law and we don't necessarily see a rise in the coverage on the other side to make a balance."
NAPH represents about 200 hospitals and health systems that are often the primary source of healthcare to Medicaid and uninsured patients. Typically in the communities that these hospitals serve 15% of the population is uninsured and nearly one-third of the population relies on government-sponsored healthcare coverage.
The CBO estimates the court's decision will result in six million to 10 million more uninsured people than estimated when Congress passed the PPACA in March 2010, bringing the total number of uninsured individuals to 29 million by FY 2019, NAPH said in a new report.
"This unexpected new level of cost to hospitals and health systems dramatically amplifies the impact of the Medicaid DSH cuts, which will total $14.1 billion over the same period.
The combined effect will jeopardize access to important healthcare services for vulnerable people and shift additional and burdensome uncompensated care costs onto state and local governments, providers, and taxpayers," NAPH said.
NAPH noted that DSH now doesn't cover all uncompensated care costs and Medicaid payment shortfalls and hasn't kept pace with the growth in the uninsured population and the cost of caring for them.
A NAPH survey of 87 safety net hospitals for 2010 found that they had incurred more than $8.4 billion in uncompensated care costs but received only $4 billion in Medicaid DSH payments.
The DSH payment cuts go into effect in federal fiscal year 2014, which starts on Oct. 1, 2013.
"Our reason for putting this out now is that Congress is going to be having a lot of tough discussions around making some considerations for the budget and we expect healthcare issues to be on the table during those discussions," Feldpush says.
"We want to remind folks that we have another issue that is coming down the pike pretty quickly that was not anticipated when the Affordable Care Act was written into law."
The PPACA gives the secretary of the Department of Health and Human Services discretion in how the DSH cuts are distributed across states.
"Given this discretion, it is crucial for regulatory decisions to address the uncertainties created by the imbalance between anticipated uncompensated care needs and the level of federal support to hospitals that shoulder the majority of this work," NAPH said in the report.
Alarm fatigue and its potential dangers have gained prominence in the last few years thanks largely to the dogged work of front-line healthcare professionals and some solid reporting in the media, particularly the Boston Globe.
This increased awareness has brought with it the acknowledgement that while alarm fatigue may be simple to understand, it also raises challenging questions. For example, if there are too many alarms, which beeps and bells are prioritized? Which can be ignored? Which are redundant? And most worrisome: What if a clinician ignores the wrong alarm? And who gets the blame?
Maria Cvach, RN, the assistant director of nursing clinical standards at The Johns Hopkins Hospital, has led the acclaimed Baltimore hospital's award-winning alarm improvement efforts since 2006. She says alarm fatigue has grown because medical devices and monitors found at hospital bedsides are not interoperable.
"Each device functions as its own little alerting system," Cvach tells me. "We work in a world where equipment is isolated, and as a nurse you have to rely on getting rid of the nuisance alarms and trying to extrapolate out of that the important alarms. It is hard to do when you have thousands of alarms a day from every device in a patient's room. In an ICU you may have seven or eight pieces of equipment that alarm. How does a nurse figure that out?"
Cvach believes most nurses do an admirable job sorting out alarms by relying on critical judgments that are based on intuition, experience, and knowledge of the particular patient.
"As a clinician, it is really hard for us to sort out all the noise that is in a room and dig out the important information," she says. "The average nurse doesn't just rely on alarms. They look at the perceived urgency of the alarm and they try to decide, based on the patient, whether or not it is important. That is why you need the critical thinking piece."
But relying on critical thinking and experience in lieu of exact science and best practices also unfairly exposes nurses and other clinicians if things go awry.
"Whenever I hear ‘someone missed an alarm,' people fail to realize that there are thousands of alarms," Cvach says. "It's like Aesop's fable about crying wolf. Where do we go to prevent any kind of events happening? Because they are going to continue to happen until we have a way to predict negative outcomes as opposed to waiting for an alarm to occur."
Cvach and The Johns Hopkins Hospital have been reviewing alarm fatigue since 2006. In that time, they've reduced audio alarms dramatically. "On the unit that I staff we started at over 500 alarms per patient per day, but we were able to reduce the number to 100 alarms per patient per day. We were able to take it down to a fifth of the amount, but that is still a lot."
It's an impressive achievement considering that The Johns Hopkins Hospital team didn't have a map when it started the journey.
"One big thing we didn't understand when we started was we didn't know how big the problem was. We didn't have any data. We used a fault tree analysis approach to try to figure out why alarms get missed," Cvach says.
"We analyzed the problem and started an intervention. We got rid of the duplication. We didn't turn things off. We turned some things to message or visible alarm instead of audible alarm. It's a visual versus an audible representation. We went through every unit and asked the leadership on that unit what do you want this to be and when is this actionable and we worked out default parameters."
The hospital also installed software that triages alarms to nurses' pagers. "We don't send everything to the nurse. They don't want 100 alarms per patient per day, so we came up with these delays," Cvach says.
"We looked at the crisis alarms and the non-crisis alarms. For the crisis alarms, which are very infrequent, we sent those to the nurse through this software. For the non-crisis alarms we set up a delay that allows the alarm to correct itself before it sends a signal to the nurse."
"If it corrects within the timeframe, Cvach explains, "we have established it doesn't send a signal to the nurse. But if it doesn't correct the nurse gets an alarm and acts on it. This really decreases the number of alarms the nurse gets. She is only getting things that are persistent as opposed to those that go away on their own."
Even though it's quieter in the wards of The Johns Hopkins Hospital these days, Cvach says staff still can't measure the effect that reducing alarms has on quality of care.
"We know that we have decreased alarms. What we don't know and what we need to determine is if we done anything to patient outcomes," she says.
"We have the number of response teams called, the number of codes that are called on the units. We can do a before and after. What we don't have is hardcore data on outcomes that are multi-site that also look at specific changes we made. That is a study that is going to happen but it takes many thousands of dollars for these randomized control trials."
Without that data, it may prove difficult for many community hospitals to take up alarm fatigue.
Not so, says Cvach. "Actually it is easier in community hospitals because they can make decisions quicker than you can in a complex place like this," she says.
For instance, reducing alarms doesn't necessarily require expensive software. "Even just changing electrodes daily, we saw a significant drop in alarms and we got good data on the monitors. If you get good data in you are going to get good data out," Cvach says.
Cvach offers a few quick steps to get things rolling.
"The first thing is you need to get an alarm committee, an interdisciplinary collaborative group that wants to solve the problem for the hospital," she says.
"No. 2 is you have to figure out a way to measure what is happening. What is your baseline?"
"The third thing is don't look at solving the problem as a whole hospital. Look at solving it as population-specific," she says. "What happens in an ICU is going to be different from what happens in a telemetry unit and that is different from a pediatric unit."
"No. 4 is to establish an alarm protocol that works for your institution not just on paper, but actually in practice.
The fifth thing is to try to establish default parameters and train the nurses so they know how to go in and customize alarms so they are actionable alarms for patients," she says.
In the short term it looks like alarm fatigue will have to be taken up by hospitals and health systems on an individual basis.
Broader efforts in the United States to solve alarm fatigue will require coordinated input from patients, device makers, clinicians, hospital administrators, professional associations, and the government.
"Part of that is to get a common language and standards between equipment. Your monitors may not speak the same language or work on the same systems," Cvach says. "The problem is we have not achieved interoperability and we are a long way from that. Once we can achieve interoperatbilty with our medical devices we are going to take a closer step to solving this problem."
Three major hospital deals announced this past week provide further evidence that the nation's healthcare sector is continuing its steady pace towards consolidation.
Catholic Health East / Trinity Health
In perhaps the largest potential merger deal this year, the boards of Newtown Square, PA-based Catholic Health East and Novi, MI-based Trinity Health announced last Wednesday that they signed a non-binding letter of intent to become a unified national health system.
The deal would create a giant Catholic health system serving 21 states from coast to coast with 82 hospitals, 89 continuing care facilities and home health and hospice programs that provide nearly 2.8 million visits annually. More than 87,000 employees, including 4,100 employed physicians, would provide care in the new system, the two systems said.
"Trinity Health and Catholic Health East are strong Catholic healthcare systems that share a Gospel-based mission and an unyielding commitment to care for people who are poor and underserved," Trinity Health Board Chair Sister Mary Mollison said in a joint media release. "This consolidation advances the vision of congregations of Sisters that founded these health care ministries, addresses the changing healthcare environment and takes a bold next step for Catholic healthcare."
If the deal is finalized, Trinity Health CEO/President Joseph R. Swedish would become president/CEO of the new health system, and Judith M. Persichilli, president/CEO of CHE, would become executive vice president.
The new system would have annual operating revenues of about $13.3 billion and assets of about $19.3 billion, and would return almost $1 billion to its communities annually in the form of charity care and other programs, the two systems said.
Both systems described the negotiations as "preliminary" and said their boards and management will meet over the coming months with a goal of signing a definite agreement sometime next spring.
Catholic Health East includes 35 acute care hospitals, four long-term acute care hospitals, 26 freestanding and hospital-based long-term care facilities, 12 assisted-living facilities, four continuing care retirement communities, eight behavioral health and rehabilitation facilities, 31 home health/hospice agencies and numerous ambulatory and community-based health services.
Trinity Health is the 10th largest health system in the nation and the fourth largest Catholic healthcare system in the country, by total number of hospitals and total bed count. Trinity Health operates 47 acute-care hospitals, 432 outpatient facilities, 32 long-term care facilities, and numerous home health offices and hospice programs in 10 states.
Ascension Health / HCA Midwest Health System
Also last week, St. Louis, MO-based Ascension Health announced that it is talking with HCA Midwest Health System to sell St. Joseph and St. Mary's Medical Centers and other Carondelet Health subsidiaries in Kansas City, MO.
Fleury Yelvington, president/CEO of Carondelet Health, said that if the negotiations lead to a sale HCA Midwest has said it would work with the local diocese to preserve the hospitals' Catholic heritage. "Being a part of a system with a large local presence would strengthen Carondelet's position in this competitive market which is critical to ensure the system's long-term success amidst the myriad of changes that are occurring as part of health care reform," Yelvington said in prepared remarks.
HCA Midwest Health System issued a brief statement confirming that it "is currently in the beginning stages of negotiations with Ascension Health to acquire Carondelet Health. We do not have a completion date for these discussions. We believe that a merger of Carondelet Health and HCA Midwest Health System could help to ensure long-term success for both organizations."
Seward Health / Massachusetts General /Brigham and Women's
Also last week, the Boston Globe reported that Seward Health Care System announced that it would transport its most critically injured patients at 10 community hospitals it operates around the city to emergency departments at Massachusetts General and Brigham and Women's, two Boston hospitals operated by Partners HealthCare System. In addition, Steward hospitals will tap the expertise of Partners physicians to establish trauma centers to handle less-severely injured patients.
The agreement was announced last week in a letter from Michael Callum, MD, president of Steward Medical Group, to the group's 700 specialists and primary-care physicians.
In our annual Industry Survey, 21% of CEOs said their organization is cutting back on high-level, high-price technology for at least some service lines. How can leaders effectively make decisions regarding the right mix of clinical technology and products to offer, considering cost, quality, and competition, among other factors?
Dennis Vonderfecht
President and CEO
Mountain States Health Alliance, Johnson City, Tenn.
On capital constraints: We aren't cutting back but we have had to delay some of our purchases of some of the higher-end technology and it's mainly because of capital constraints. We have had a number of replacement hospitals we have built over the past four years and so a lot of our capital budget has gone toward that.
On delays and reassessments: We have done a lot of analyses on robotics and the return on investment and it's kind of a mixed bag. We have the da Vinci robot here—the first in the region. We had a good return on it but there are other areas of robotics where the big question mark is the financial return on the investment. The fact that we have had to delay some of these purchases does give us a little bit more time to see what some other organizations are experiencing—maybe not being on the leading edge but being timely.
On investment in a time of uncertainty: I don't want to say the uncertainty is causing us pause but it is one of those factors that we are taking into account a little more. Even though this equipment might be nice to have, if we have to, we can wait another year to see how it goes as far as the reimbursement picture on some of them. But we have a capital plan here that we stick to and it has served us well over the years and there is no reason to think that it won't in the future.
Alison Page
CEO
Baldwin (Wis.) Area Medical Center
We are not cutting back on high-level technology. We look at it by the services we offer and what is the equipment we need to offer that service. We roll them up and we have a magic number that we set for how much we can spend—which in our case is the equivalent of our last year's depreciation. We are a small hospital, less than $50 million in revenues. So it's about $880,000 in capital each year that we are spending now. We look at what we have to do and what we'd like to do to offer more and better services or to upgrade the standards. We put it in the capital budget and see if it will fit.
We are part of a larger imaging co-op that buys the equipment and leases it back to us. Then you transfer those costs to the operating budget versus the capital budget. That saves money in the capital budget. If you have more capital appetite than you have dollars, we look at what we can transfer off the capital budget into the operating budget through some sort of lease arrangement.
Gary Muller
President and CEO
Marquette (Mich.) General Health System
We, in the past, have not had the capital to invest in clinical technology. The new partnership we have with Duke LifePoint is going to help us. They have a whole process that is really good about business planning and return on investment and improving quality. We would work through the Duke LifePoint process to vet the clinical technology from a quality standpoint, a service standpoint, and return on investment.
We know there are going to be Medicare cuts and cuts with readmissions. If you don't decrease them you lose. The accountable care organizations carry a big risk. The uncertainty is huge. With our new capital partner, it will help us determine some of that and then we can invest. But for the freestanding hospital, with all this uncertainty, I'd say probably not. You need the scale to give you the comfort and security to make those decisions.
Stephen L. Moore, MD
Senior Vice President and CMO
Catholic Health Initiatives, Englewood, Colo.
A couple of things are driving the challenges. Whether economically related to the recession or related more to the changing of health benefits by employers—the entire industry is seeing a significant decrease in volume and patient revenue related to volume, which then starts to call into question the ability to fund your capital needs. The second is more reflective of what we are doing at CHI: a complete reorientation of our capital investments that used to be going toward new hospitals and putting new technology into our hospitals, and is now moving more toward what we call strategic capital. We are investing more in data analytics to prepare ourselves for population health and clinical IT infrastructure foundations including health information exchanges, EHR, and then strategic joint ventures where we are spending money to strengthen our regional presence either with out-and-out mergers and acquisitions or less so with the technology and products to offer.
We have solidified more of our discussions around a capital review committee process in our organization. A current decision was bringing in the TAVR [trans-aortic valve replacement], which you can do with a non-cardiac surgery valve implant at the top of the heart. It makes little sense financially from a Medicare reimbursement perspective, but it is cutting-edge technology that will help not only bring recognition regionally to parts of the organization that are performing this, but also will add a lot of value to the clinical literature as well. That is an example of where we have taken a comprehensive look at a clinical improvement technology that we have decided to go ahead with, even though it may not have had the best financial outcomes.
Hospitals and other healthcare organizations have done a good job in the last 20 years building mechanisms to monitor and report preventable errors. However, those efforts are hobbled by clinicians' reluctance to report colleagues' mistakes for fear of retaliation, according to a new report from the National Association for Healthcare Quality.
"In fact, as attention to creating a culture of safety in healthcare organizations has increased, so have concomitant reports of retaliation and intimidation targeting staff who voice concern about safety and quality deficiencies," according to the report, Call to Action: Safeguarding the Integrity of Healthcare Quality and Safety Systems.
Peter Angood, MD, CEO of the American College of Physician Executives, which helped compile the report, says the fear of retaliation is "very distinct and quite palpable in many organizations to the point that there is even a fear of making comment" about the existence of the threat.
"It is multi-factorial," Angood tells HealthLeaders Media. "Some of it comes from historical orientation of hospitals and healthcare systems towards the physicians and making sure they are happy and as long as they are happy there is good patient flow and everybody wins.
As we transition off of that entire focus toward physicians and more towards patients there are the lingering cultural habits of not wanting to cross the physician's path if things aren't going right."
Angood says the fear of retaliation is also rooted in the traditional risk management models that hospitals have used for years.
"Risk management programs in hospitals historically have been oriented to protect the hospital from legal action. So in many places, not all, there is a fear from the administration and the risk management offices of receiving reports because it becomes discoverable information and the potential for legal liability," he says.
"Once that tone is set it doesn't take much for the workforce to recognize that reporting can be harmful for the institution. So they won't report."
Angood believes the fear of retaliation will wane in the long run as more physicians become hospital employees, "but we will probably go through a little dip and then move on to a projection of improvement."
"That dip will occur because the existing physician workforce and many in the non-physicians workforce are caught in the trap of fear of reporting and the pressure for models of care change," he says.
"As employed physicians get usedto that, there will be an increased level of education and awareness on the benefits of tackling errors and safety problems head on with improved reporting. Other industries have recognized that good reporting strategy leads to improvements in quality and safety and employed physicians will gradually bring that forward in healthcare systems."
"On another level, if the reporting system is not oriented towards improving quality and transparently and safety then the reporting system is perceived as a 'gotcha!'"
The report notes that new reimbursement models that diverge from fee-for-service and instead reward outcomes and patient satisfaction create an even greater need for strong infrastructures to collect accurate data and address patient safety concerns.
The report urges hospitals to:
Focus on accountability for quality and safety as part of a strong and just culture.
Build protective structures that encourage reporting quality and safety concerns.
Compile transparent, accurate data and reporting to internal and external oversight bodies.
Act on quality and safety concerns.
Foster teamwork and open communication.
Even the best safety and reporting infrastructures may be stymied by an unwritten code of silence among clinicians and administrators, Angood says.
"The majority of care in this country is provided in hospitals of 300 beds or so and a lot of them are in smaller communities," he says. "It goes back to the human behavior piece. If you are going to work with the folks you see at the gas station or out shopping are you going to report each other out? Likely not."
A study conducted at 43 HCA-affiliated community hospitals saw bloodstream infections, including methicillin-resistant Staphylococcus aureus (MRSA), drop by 44% when all ICU patients were subjected to daily "universal decolonization" using antimicrobial soap and nasal swabs.
"The magnitude of this trial is such that it will create a standard of care for most ICUs in the U.S.," study coauthor Ed Septimus, MD, told HealthLeaders Media. "Obviously once this study results are well known we do expect a rapid adoption across most hospitals in the United States."
Nearly 75,000 patients and more than 280,000 patient days in 74 adult ICUs in 16 states were involved. Investigators compared three infection control approaches in ICUs:
Screen all patients and isolate MRSA carriers
Targeted decolonization after screening
Universal decolonization
Universal decolonization proved to be the most effective. Patients were bathed daily using chlorhexidine antiseptic soap and their noses were swabbed twice daily with mupirocin antibiotic ointment.
The process reduced the number of patients harboring MRSA by 37% and all bloodstream infections decreased by 44%, says Septimus, who is also HCA's medical director of infection prevention and epidemiology.
The REDUCE MRSA study was released this week at IDWeek 2012, the annual meeting of infectious disease organizations.
Septimus says universal decolonization will be implemented at nearly all HCA-affiliated adult ICUs in early 2013, and that further studies planned for next year may encourage universal decolonization for all hospital in-patients.
He noted that the study involved mostly HCA community hospitals rather than academic institutions using hospital staff instead of specially trained researchers.
"We wanted to test this is a real-world situation. Most studies are done in academic medical centers with very tight inclusion and exclusion criteria," he says, adding that similar results would likely be applicable in nearly every hospital.
Septimus offered several reasons for why universal decolonization is not more widely used now.
"First, its effectiveness hadn't been proven before this study. Secondly there can be local side effects from applying the antibiotic solution, although those were very unusual. Third, we are monitoring this to make sure the bacteria don't develop resistance to the bathing," he says.
"There is a downside to the overexposure. We have to make sure that we do no harm long term. Right now in terms of the risk/benefit ratio the benefit to the patient has been overwhelming and the risk appears to be very small," he says.
